Correlation Between SYSTEMAIR and CNVISION MEDIA
Can any of the company-specific risk be diversified away by investing in both SYSTEMAIR and CNVISION MEDIA at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SYSTEMAIR and CNVISION MEDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SYSTEMAIR AB and CNVISION MEDIA, you can compare the effects of market volatilities on SYSTEMAIR and CNVISION MEDIA and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SYSTEMAIR with a short position of CNVISION MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SYSTEMAIR and CNVISION MEDIA.
Diversification Opportunities for SYSTEMAIR and CNVISION MEDIA
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between SYSTEMAIR and CNVISION is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding SYSTEMAIR AB and CNVISION MEDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNVISION MEDIA and SYSTEMAIR is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SYSTEMAIR AB are associated (or correlated) with CNVISION MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNVISION MEDIA has no effect on the direction of SYSTEMAIR i.e., SYSTEMAIR and CNVISION MEDIA go up and down completely randomly.
Pair Corralation between SYSTEMAIR and CNVISION MEDIA
Assuming the 90 days trading horizon SYSTEMAIR AB is expected to generate 1.02 times more return on investment than CNVISION MEDIA. However, SYSTEMAIR is 1.02 times more volatile than CNVISION MEDIA. It trades about 0.06 of its potential returns per unit of risk. CNVISION MEDIA is currently generating about 0.03 per unit of risk. If you would invest 557.00 in SYSTEMAIR AB on September 14, 2024 and sell it today you would earn a total of 248.00 from holding SYSTEMAIR AB or generate 44.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SYSTEMAIR AB vs. CNVISION MEDIA
Performance |
| Timeline |
| SYSTEMAIR AB |
| CNVISION MEDIA |
SYSTEMAIR and CNVISION MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SYSTEMAIR and CNVISION MEDIA
The main advantage of trading using opposite SYSTEMAIR and CNVISION MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SYSTEMAIR position performs unexpectedly, CNVISION MEDIA can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in CNVISION MEDIA will offset losses from the drop in CNVISION MEDIA's long position.The idea behind SYSTEMAIR AB and CNVISION MEDIA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| CNVISION MEDIA vs. Apple Inc | CNVISION MEDIA vs. Apple Inc | CNVISION MEDIA vs. Apple Inc | CNVISION MEDIA vs. Apple Inc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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